Updated October 5, 2016
OneMain Financial was recently acquired by Springleaf, and offers personal loans to borrowers via its branch network. (Note: Springleaf is changing its name to OneMain). OneMain Financial will approve people with lower FICO scores, including scores below 600. If you apply before noon you can have the money during the same day. However, the interest rates tend to be higher than other online lenders – especially if you have an excellent credit score. In addition, you will need to visit a branch in order to get your loan.
MagnifyMoney strongly encourages you to shop online for a loan because you could get significantly lower interest rates than OneMain- without going to a branch. We recommend starting with LendingTree – where you can shop with dozens of lenders using one simple application form. See what deal you get at LendingTree before going to a OneMain branch.
- LendingTree: [Disclosure: LendingTree is the parent company of MagnifyMoney.]You just need to fill out one application form, and LendingTree will reach out to dozens of lenders. LendingTree uses a soft credit pull – which means your credit score will not be hurt. You will be able to see real offers (including how much you can borrow and the rates). For people with excellent credit, rates could be lower than 6%. For people with less than perfect credit, LendingTree does partner with lenders who have more liberal acceptance criteria.
In this OneMain review, we will share:
- The terms of the loans offered
- The minimum acceptance criteria
- The loan application process
- The fine print and traps that you need to avoid
- Alternatives that you should consider
OneMain Financial offers personal loans up to $25,000.
The interest rates are from 25.10% – 36.00%.
OneMain Financial loans are not available for business expenses or tuition. However, beyond those restrictions, you can use the proceeds of your loan for any purpose. The loan will be disbursed to you in the form of a check, which can be deposited into your bank account and then used for any purpose. Note: if OneMain Financial is made aware during the application process that you plan to use the funds for gambling or any illegal purposes, your application would be declined.
The loans are fully unsecured, and no collateral is required.
In addition to the loan, OneMain Financial will likely try to sell you insurance products. It offers several types of insurance:
- Unemployment insurance: if you lose your job during the term of the loan, some of your monthly loan payments would be paid on time
- Life insurance: if the primary borrower dies during the term of the loan, the insurance proceeds would pay off any remaining balance
- Disability Insurance: if you become disabled, payments would be made on your behalf
Before buying insurance from OneMain Financial, you should seriously consider other options. For example, it is usually much cheaper to buy a term life insurance premium that would cover all of your needs, and not just the loan.
There is no prepayment penalty, and you can choose your due date to make sure that it aligns with your paycheck cycle.
Minimum Acceptance Criteria
Although OneMain Financial has a lower credit score cutoff, it still has some strict credit criteria. Here are some of the most important requirements:
- You must be employed, and have verifiable income. It is easiest if you have full-time employment with paystups. If you are self-employed, you will likely be asked for a few years of tax returns. OneMain Financial is serious about making sure you have steady, recurring income. It could be difficult to be approved if you have highly volatile income or depend largely upon bonuses or other variable compensation.
- You should have a credit score of at least 600.
- No bankruptcy filings. If you filed bankruptcy in the past, you will be declined.
- You are at least 18 years old (19 in Alabama and Nebraska)
- You are a resident of the United States (but do not live in Alaska, Arkansas, Connecticut, Massachusetts, Nevada, Rhode Island, Vermont or Washington, D.C.)
- You have some established credit, which means you have a history (it can be short) of making payments on time with some accounts.
- You can demonstrate an ability to repay. OneMain Financial will talk to you about your income and your monthly expenses. Unlike credit card companies, it will go into much greater depth about where and how you spend your money. And it will look at both a debt burden ratio (the percent of your income that goes towards debt payments) and your cash flow. You need to prove that you will be able to afford all of your existing payments and your new loan payment, and still have money left over.
Note: If you are using the OneMain Financial loan to pay off other credit card companies, you can have OneMain Financial make check payments directly to the credit card companies. When you do this, OneMain Financial will not double count the credit card monthly payments (which you are going to pay off) and your new loan in the debt burden.
OneMain Financial is not a payday lender or title loan company. It’s willing to make loans to people with a lower credit score. But, OneMain Financial doesn’t approve everyone with a 600 credit score. You will have to provide documentation verifying your income and sit down with a loan officer. OneMain Financial will only make loans to people who prove that they can afford to repay. And its much more rigorous in its underwriting than credit card companies (which generally don’t verify information) or payday lenders (which generally don’t test affordability).
For these reasons, we give OneMain Financial a B rating in our Transparency Score.
You can apply for a loan online. However, in order to actually get the loan you will need to visit a branch. To find out if a branch is near you, use this branch locator.
If there is a branch near you, start the loan application process online. It is a quick and easy process. However, it will result in a hard inquiry on your credit report (which typically takes 10 to 20 points off your score).
Once you complete the online application (which is fairly standard), you will get an instant response. If you are approved, you will be referred to a branch. In addition, you will most likely be required to bring in a few bits of information. OneMain Financial will usually ask you to verify your identification (a driver’s license usually works), your address (via a utility bill) and your income (via a paystub).
When you bring those documents into the branch, the employee will verify the information and then have you sign the loan documents. You will then be given a check that you can deposit into your bank account. If you bring all of the right documents, you can spend less than 30 minutes in the branch.
If you apply online before noon, you can usually get the loan on the same day. Otherwise, you will get your loan the next day.
After the loan is approved, you have 14 days to change your mind and return the loan proceeds. If you do that, you will not be responsible for any of the accrued interest.
At the time of the loan closing, OneMain Financial will try to sell you add-on insurance products. In addition, you will have to select your due date. We highly recommend selecting a due date that aligns with paycheck being deposited into your bank account.
Fine Print Traps
Personal loans are relatively simple contracts. You borrow a fixed amount of money, for a fixed period of time at a fixed interest rate.
The loans offered by OneMain Financial are interest bearing, and interest accrues daily. You can take advantage of that by making payment more often. For example, if you pay your account weekly you will reduce the amount of time it takes to pay off your loan. However, if you pay late (especially early in the loan term), you could end up adding years to your loan. So, make sure you always pay on time. And it is to your benefit to pay earlier and more often than required.
OneMain Financial will service the loan from the branch where you booked the loan. However, a big part of the incentive scheme for the branch employees is to lend more money. That means they will constantly be tempting you with more cash. Once you are an existing customer making payments on time, OneMain Financial will make it very easy for you to borrow more money quickly. Just make sure you stick to your plan of paying off the debt.
The insurance offered by personal loan companies like OneMain Financial can offer questionable value. Make sure you do your homework before signing up for any insurance products.
OneMain Financial loans are incredibly convenient, especially if the branch is near you. However, as your credit score improves (especially above 600), you may be paying too much for a OneMain Financial loan. Make sure you shop around to see if you can get a better deal somewhere else.
Alternatives You Should Consider
For a long time, OneMain Financial and Springleaf* were the only two companies making personal loans (and now they are combined). In the last few years a number of online personal loan companies have been created. These companies do not have the expense of a branch network, and can offer much lower interest rates. Even better, with most of these loan companies you can check your rate without hurting your credit score.
We encourage you to use our personal loan marketplace to consider other companies. If your score is above 700, you could probably get a rate as low as 5.17% from lenders like SoFi*, which offers no origination fees, no prepayment penalties and no application fees. If your score is below 700, most of these companies will still beat OneMain Financial pricing. LendingClub* approves scores down to 600 and offers APR ranges of 5.99% – 35.89%. Even better, you will not need to go to a branch. LendingClub is not available in Iowa or West Virginia.
It only takes a few minutes to see if you can qualify at all of the online lenders listed in our marketplace. If you can’t find a loan that works for you, then OneMain Financial may be the right option.
However, if you need the money today (or even in the next few days), the online lenders are not for you. OneMain Financial still beats the internet-only lenders with its ability to make decisions and disburse funds same day. But you will pay for that convenience.
*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.